How do I deduct gifts for clients tax deductible on my taxes?

The IRS allows a deduction for business gifts to clients, but the deduction is limited to $25 per recipient per tax year. This limit applies regardless of the number of gifts given to the same person. If you give a gift to a client's family, the $25 limit applies to the entire family. Incidental costs, such as engraving, packaging, or shipping, do not count towards the $25 limit. However, gifts that are considered entertainment, such as tickets to a show or sporting event, are not deductible as gifts but may be deductible under entertainment expenses, subject to different rules. It's important to distinguish between gifts and promotional items; items with your business name that cost less than $4 and are widely distributed can be deducted as advertising expenses instead.